Proving source of funds in Spanish property purchases

Few questions unsettle an international property transaction as reliably as this one: where did the money come from? Buyers tend to read it as an intrusion into their privacy, agents as friction in a sale that was going well. Legally, the answer sits outside those sensitivities. Real estate agents are obliged entities (sujetos obligados) under Art. 2.1(l) Ley 10/2010 and must record the purpose and nature of the business relationship as part of their customer due diligence (diligencia debida) — and that includes the intended payment and financing route. Establishing the source of funds (origen de fondos) is therefore not an optional extra, but part of that duty.

This holds regardless of the language the agency works in or the buyer's nationality. What decides the question is where the brokerage activity is carried out: in Spain.

There is no price threshold — only a risk assessment

Probably the most persistent misconception is that checks become "serious" above a certain purchase price. No such threshold exists. What matters is an overall risk assessment of the individual case, drawing on the buyer's country of origin, the payment route, the complexity of the buyer structure and any PEP status (Persona Expuesta Políticamente, politically exposed person), among other factors. An unremarkable purchase at a high price may be satisfied with light documentation, while a considerably cheaper property can call for enhanced evidence where risk indicators are present.

Country of origin is only one of those factors — it weighs more heavily where capital controls or elevated corruption risk exist there. Drawing conclusions from nationality alone is as wrong as assuming that an EU country of origin makes any check unnecessary.

What counts as evidence — and what is not required

What is sought is not a particular document, but a plausible, traceable explanation. Depending on the risk classification, that can be evidence of a property sale in the buyer's home country, evidence of an inheritance, documentation from a business sale, or bank statements from which the origin of the savings is apparent. There is no exhaustive statutory list; which evidence is appropriate depends on the risk of the individual case.

Two terms that are often conflated in practice belong apart here: Proof of Funds shows that money is available. Source of Funds explains where the money actually used came from — the latter is the relevant concept for source-of-funds checks.

A verbal explanation from the buyer can suffice as a starting point in a low-risk case — but only where three things are put in writing: the explanation itself, the assessment of its plausibility, and the reasoning behind the risk classification the decision rests on. A verbal statement recorded nowhere is not evidence after the fact, it is an assertion. Whether the explanation suffices on its substance additionally depends on the risk and plausibility of the case; where risk is elevated, additional documentation may be required. Nor does SEPBLAC (Servicio Ejecutivo de la Comisión de Prevención del Blanqueo de Capitales, Spain's financial intelligence unit) prescribe a fixed document catalogue.

Through the transaction: ask early, assess continuously, document properly

The most common organisational mistake is not a badly run check, but one run at the wrong moment. An agent who raises source of funds shortly before the notary appointment is left with documents that cannot be obtained at short notice — particularly where evidence has to come from abroad. The question belongs at the start of the process.

A sensible sequence in four steps:

Record the payment method and financing type — own funds, a loan, or a combination of both.
Plausibility check — does the stated source of funds match the buyer's profile, that is, occupation and known financial standing?
Request further evidence where risk is elevated — sale proceeds, inheritance documentation or bank statements, depending on the case.
Documentation — record the basis for your own assessment traceably and retain it for ten years as a general rule.

The character of the check matters as well: it is not a box ticked once, but an ongoing evaluation throughout the business relationship. If the payment route or the circumstances change, the assessment may need updating. Relying on a verbal explanation without setting it down in writing is equally problematic — if it comes to it, the agent must be able to show what the assessment rested on.

The agent is not the only one checking

Closing your own check does not close the matter. Spanish banks are themselves separate obliged entities and carry out their own independent assessment when receiving the purchase payment — regardless of the agent's assessment. Bank and agent requirements may differ. That the agent raised no objection therefore does not mean the payment will clear smoothly on the banking side.

And if doubts persist despite all the questions? Then an internal review of the suspicious circumstances and, where applicable, a report to SEPBLAC may become necessary. That decision rests with the obliged entity — it cannot be sidestepped out of deference to the buyer.

Doxario practice observation

A case from the agency's own practice, from before Russia's war of aggression against Ukraine: a Ukrainian buyer held his funds in Luxembourg. The origin of these funds had to be carefully assessed, even though the transfer itself was unproblematic — Luxembourg was not subject to capital controls; the assessment concerned only the plausibility of the wealth's origin.

Since the start of the war, Ukraine has maintained foreign exchange and capital control restrictions that can limit cross-border transfers depending on the type of transaction. Ukraine's central bank has been easing these rules step by step — most recently with a significant relaxation package adopted on 10 August 2026 and in force since 11 August 2026 (source: National Bank of Ukraine, bank.gov.ua). For agents, this means: with buyers from countries under capital controls, the transfer route itself can be an additional, time-sensitive AML risk factor — one that should be assessed on a case-by-case basis rather than assumed outright.

Outlook: the AMLR from 2027

The European framework will become more specific. The EU Regulation (2024/1624) AMLR becomes directly applicable across the EU from 10 July 2027 and explicitly names real estate agents as obliged entities. Certain technical specifications of the due diligence obligations are still going through the European rule-making process. This article will be reviewed again before the AMLR takes effect.

How Doxario helps

Doxario helps agents trigger the collection of payment method and source-of-funds information in a structured way, at a defined point in the transaction process — and to document the assessment traceably. Doxario does not replace the agent's professional judgment or legal advice in the individual case.

Doxario is a service of Blue Pepper S.L., a company based in Spain.

Don't leave source of funds until just before the notary appointment. Doxario helps agents request and document the required information and evidence in a structured way throughout the deal. See how Doxario works →

Frequently asked questions

Do I need to check source of funds on every purchase?

Source of funds is part of the risk-based assessment and ongoing monitoring of the business relationship. How far it needs to be substantiated with documentation depends on the risk of the individual case. Where risk is elevated, additional evidence may be required.

Above what purchase price do I need enhanced evidence?

There is no fixed price threshold. What matters is an overall risk assessment.

What documents are suitable as evidence?

There is no exhaustive statutory list — depending on the case, this may include sale proceeds documentation, inheritance evidence, or bank statements.

Is a verbal explanation from the buyer sufficient?

In a low-risk case it can suffice as a starting point, but three things have to be documented: the explanation itself, the assessment of its plausibility, and the reasoning behind the risk classification. Whether it suffices on its substance additionally depends on the risk and plausibility of the case; where risk is elevated, additional documentation may be required. SEPBLAC (Servicio Ejecutivo de la Comisión de Prevención del Blanqueo de Capitales, Spain's financial intelligence unit) does not prescribe a fixed document catalogue.

What's the difference between "Source of Funds" and "Proof of Funds"?

Proof of Funds shows that money is available. Source of Funds explains where the money actually used came from — the latter is the relevant concept for source-of-funds checks.

Does only the agent check source of funds, or the bank too?

Spanish banks are themselves separate obliged entities and carry out their own independent assessment when receiving the purchase payment — regardless of the agent's assessment. Bank and agent requirements may differ.

What happens if source of funds remains unclear?

If doubts persist, an internal review of the suspicious circumstances and, where applicable, a report to SEPBLAC may become necessary.

Does the buyer's country of origin play a role in the assessment?

Yes, country of origin is one of several risk factors that feed into the overall assessment — for example where capital controls or elevated corruption risk exist there.

About the author

Christopher Deppe is Managing Director of DC Finest Real Estate Mallorca and founder of Doxario, a KYC/AML compliance platform for real estate transactions in Spain. He has more than 15 years of experience in the luxury segment of southwest Mallorca. As the founder of Doxario, he has an economic interest in the solution described in this article.

This article is for general informational purposes and does not replace individual legal advice from a lawyer. AI-assisted tools were used in the preparation of this article; the content was subsequently reviewed and approved by the Doxario editorial team. An update is planned following publication of the final AMLR technical standards.

Legal basis and sources

Ley 10/2010, of 28 April, on the prevention of money laundering and terrorist financing (esp. Arts. 2, 3, 5–7, 25)
Real Decreto 304/2014
Regulation (EU) 2024/1624 (AMLR)
SEPBLAC — sepblac.es